Back to index
V2505-19 17 September 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · rehabilitación de edificaciones

Handover of a property following renovation may be deemed a first delivery and subject to VAT

A company sought clarification on whether the handover of a property following repair and improvement works would be exempt from VAT as a second delivery. The DGT ruled that if the works meet the requirements for renovation, the handover is considered a first delivery and is therefore subject to the tax.

The question raised

Whether, in the event of the subsequent delivery of the property by the consulting entity, the exemption provided for in Article 20.One.22 of Law 37/1992 would apply.

The DGT's ruling

For the delivery of a dwelling following works to be considered a first delivery and subject to VAT, the works must be rehabilitation works. This requires that the main object be reconstruction (more than 50% of the cost in structural elements, facades, or roofs) and that the total cost exceeds 25% of the acquisition price or market value (excluding the land). The nature of the works must be substantiated with means of proof such as professional reports or official endorsements.

Book your free first meeting